Adopt Minimum Tax For Fat Cats

August 12, 1985

SPECIAL INTERESTS WILL fight to preserve every nickel income tax break they`ve ever received. Homeowners, philanthropists and those who pay state taxes will buffet their federal representatives from every angle.

If Congress does nothing else when it finally focuses on tax reform, however, it should make certain that the new rules contain an effective minimum payment requirement for the wealthy.

Everybody has stories about large and successful corporations that pay no taxes. Few have the figures that reveal just how easy it is for individual citizens to grow rich and still take a free tax ride.

In a study of 1983 returns the Treasury Department found that almost 30,000 in the $250,000-and-up bracket paid little or no taxes. That figure includes 3,170 who earned more than $1 million in `83.

To take the numbers a step farther, 17,000 of those making in excess of a quarter of a million dollars had tax bills of less than $6,272. What makes $6,272 significant? That is the amount paid by the typical family of four earning $45,000.

Those who make big money and pay small taxes often use shelters -- some legitimate, some questionable -- to reduce their obligations. Others do the job with paper losses.

They are not breaking the law. But they are proving that the law is badly in need of revision. A strong minimum tax provision would make reform more palatable for citizens who, in relation to thousands of fat cats, pay far more than their share of the government`s debts.